Predictions for 2017
A new year is finally here and with it, new challenges and opportunities for independent car dealers. What will this year be like for dealers? Will it be successful? Will small businesses struggle? To determine what 2017 will be like, we reached out to several people including an attorney Jordan Mayfield, independent auto dealer Robert Milligan and Texas State Representatives Drew Springer and Eddie Lucio III. They shared their expert opinions on issues such as the Texas economy in the new year, how Trump's presidency will affect the industry and even who will win next month's Super Bowl. (Hint: How ‘bout them Cowboys!)Jordan Mayfield
Attorney – Naman, Howell, Smith & Lee
How will the Texas economy perform in 2017? I think that we will continue to see slow and steady growth as jobs grow in the healthcare and educational sectors, coupled with a small increase in the oil and gas sector.
What will be the biggest challenge independent dealers will face in the next 12 months? From a legal standpoint, I see the biggest challenge facing independent dealers is attempting to navigate the growing maze of rules and regulations. At this pace, I think that we may run out letters for the laws that dealerships need to comply (GLB, TILA, OFAC, ADA, ECOA, FCRA, etc.). Currently I am seeing an increase in wage and hour complaints, employment discrimination claims, and consumer complaints. Dealerships should start the year off right and review their current processes with their legal counsel to work to ensure compliance.
How will President-Elect Trump have a positive or negative impact on the independent auto industry [or small business owners]? It is going to be HUGE! I do not know what that means but am hopeful that consumer confidence will continue to rise and dealers across Texas will reap the benefits of a growing economy.
Who will win the Super Bowl next month? The advertising companies always win. I hope for some awesome commercials. I know that some may not be Dallas Cowboy fans but I am hopeful that the Cowboys will win the Super Bowl since they were my team as a kid. I love the new talent on the team and think it would be great for Texas.
PBR Auto Sales – Buy Here Pay Here Dealer
How will the Texas economy perform in 2017? I think the Texas Economy is going to perform like it did in 2016, when clearly there was an uptick in car sales. Some cities might see a slowdown, but those would be cities related to the oil and gas industry. However, I think Texas as an overall economy is going to perform well in 2017.
What will be the biggest challenge independent dealers will face in the next 12 months? The same challenge that we have been facing: There are a lot of regulatory agencies and trying to keep up with it is a continued drain on resources
I also believe that with all the delinquencies in subprime you are going to see a lot of the big lenders pulling out or at least being cautious. This will make it much more difficult to get the subprime deals done. Therefore, there will be an uptick in Buy Here Pay Here deals. But on the Buy Here Pay Here side, as all lending institutions see delinquencies increase, they too are going to start getting worried when the larger credit lines fall out.
How will President-Elect Trump have a positive or negative impact on the independent auto industry [or small business owners]?I don't know that Trump can affect anything in the Dodd-Frank Act in the next year that would affect us. I think we are still going to have the regulation. If there is anything positive about it, I do believe Trump is going to try and reduce the tax rates for people in general and that could help the economy.
Who is going to win the Super Bowl in 2017? My prediction is that Dallas wins of course. I think Jerry Jones has finally gotten lucky. He didn't do anything but he finally got lucky and found some great players.
State Representative Drew Springer
District 68 (R)
How will the Texas economy perform in 2017? I think it is going to be on the uptick. Oil and gas has stabilized and is trending up and I think we will continue to see that. We won't get back to the days of old but steadiness and trending upwards is positive for that industry. It is a good chunk of the economy, but we have a much more diverse economy so we are not solely reliant on oil and gas. I think other sectors of the economy are doing well. We continue to attract more people from other states. More people means more consumers buying things.
What will be the biggest challenge independent dealers will face in the next 12 months? I hope the biggest challenge they face is how fast they can respond to less regulations. One of the things we are going to look at here in the 85th Legislature is making sure we don't have any more of these overreaching local governments that are stepping beyond what a city should be doing. I know after visiting the dealers that some don't have any problems and some have massive problems like in Pasadena. We understand we want cities to be unique but they can't stifle the relationship between consumers and the business.
How will President-Elect Trump have a positive or negative impact on the independent auto industry [or small business owners]? From a dealer's standpoint, I think it is going to be positive. Everything he has said has been about less regulation and rebuilding the blue-collar workforce and bringing jobs back. That has got to be good for somebody who is looking for an affordable vehicle and being able to make a payment for that vehicle. I think that is a positive.
Who is going to win the Super Bowl? The Dallas Cowboys. It has been such a long dry spell, the outpouring of support for this Cowboys team has been incredible. Even the guys who are just casual haters are starting to love them.Absolutely 100% behind the Cowboys winning this thing.
State Representative Eddie Lucio III
District 38 (D)
How will the Texas economy perform in 2017? Well everyone is concerned with the oil and gas industry and how that will affect the economy. But our economy is so much more diverse compared to the 1980's where a downturn in that sector was so devastating. Because of that diversity I think we can withstand this lull and have a profitable, growing economy. The fact that Texas has 1000 people moving here a day helps. I believe Texas stands a chance to become one of the best economies in the world.
What will be the biggest challenge independent dealers will face in the next 12 months? I think infrastructure is going to be a challenge for businesses. We are growing faster than we previously planned for in previous decades. For independent dealers that have businesses that require adequate infrastructure to get inventory delivered to them, that's going to be a big issue. How we afford infrastructure in a state that's growing faster than we can keep up with, especially with the tremendous cost of infrastructure, that's going to be a big issue.
Secondly, is Texas going to continue to have a tax structure that favors small businesses? I think it is, but we need to be mindful of that. We need to be mindful of regulations and bills that we are passing each legislative session and how that impacts small businesses.
How will President-Elect Trump have a positive or negative impact on the independent auto industry [or small business owners]? I am a Democrat, and I supported the Democrat, but I am praying and rooting for Trump to have a successful presidency. He does have a successful background in business, and hopefully, he can translate that into good, solid government. He is taking a strong position on keeping manufacturing jobs in America. That's great for the U.S. economy. I think we have to have a delicate balance with keeping the cost of the product down. We need to maybe have partnerships like we have had on the border for years. We can have dual plants where we can take the brainpower of designers and engineers and keep them on the US side but have some of that component manufacturing that is tedious on the Mexican side and still grow our economy on the US side.
Who will win the Super Bowl? The Dallas Cowboys. That's easy. I honestly believe Dak Prescott is going to be a Hall of Famer and take us to the promise land.
Editor's Note: Be sure to check out the February issue of the Texas Dealer magazine for the full, extended interviews with these individuals.